The outside definitely has a structural function, but that, as the others have said, is fairly easy to restore, either by riveting new metal over it, or, better still, cutting out the rot and welding in new metal. But the whole rocker is a structural member and its strength depends on the integrity of all its components, just as the rest of the strength of the body depends on the integrity of all the other pieces working together - not the case when you have a separate, real chassis under the body. Still, compared to today's vehicles, these cars have so much extra strength built into them, the famous Volvo safety factor, that they will put up with a lot of rot before they sag to the ground in the middle. ;-)

--
‘62 PV544 (B20, M41), '71 142E, '93 240 Classic Wagon.